Distinguishing between an Offer and an Invitation to Treat - Assignment Example

Distinguishing between an Offer and an Invitation to Treat In law of contract, there is clear distinction between an offer and an invitation to treat. In Law, a contract is defined as an agreement between two or more persons which is intended to create a legally binding obligation. The word binding is normally used for there are some contracts which are valid but are not enforceable. There are a number of elements that must be achieved for a contract to be varied and they include: Offer and acceptance Contractual capacity of the parties Object of the contract should be lawful Genuine consent meaning that the consent must not be obtained through mistake, misrepresentation, duress or undue influence The contract must be under a deed or a consideration There must be an intention to create legal relations. 1 An offer and acceptance is one of the essential elements for a contract to be varied. This means for a contract to exist, there must be some someone who have made an offer called offerer and the offer must be accepted by the person the offer was made to called offeree. An invitation to treat comes in when something is displayed in a shop window or a catalogue mentioning prices of goods. Normally this is not an offer; hence it cannot coerce the shopkeeper to sell the items at the stated price. For this case a contract is made when a prospective buyer accepts the price stated in the items and it created when the item is placed over the counter but not when the customer remove the item on the supermarket shelves. An example is of cases that were studied on invitation to a treat are those of Fisher versus Bell in 1961 and that of Pharmaceutical Society of Britain versus Boots Chemists in 1953. Fisher v Bell, 1961 B, a shopkeeper, displayed a flick knife priced at four shillings in his shop window. He was charged with offering for sale an offensive weapon contrary to the restriction of Offensive Weapon Act. It was held that merely displaying of goods in a shop window is not by itself an offer for sale. B was not bound to sell the knife to any one entering his shop and offering him four shillings.2 Pharmaceutical Society of Britain v Boots Chemists, 1953 Goods were sold in B's shop under the self service system. Customers selected their purchases from the shelves, put them into a baskets supplied by B and took them to the cash desk where they paid for them. It was held that the customer made the offer when he presented them at the cash desk, and not when he removed them from the shelves.3 Similarities between an Offer and an Invitation to Treat There is an acceptance in both offer and invitation to treat. For example in an offer, there must be an offeror and an offeree while on the hand in invitation to treat there must be a place or a shop where goods have been displayed together with their prices and a customer makes an offer when he present them at the cash desk. Both offer and acceptance remain open for duration of time and they can be accepted only before time expires. In both offer and invitation to treat, the offeror is free to attach any condition in the offer or invitation to treat before he communicated to the target group for acceptance. There is an intention to create a legal relation. One cannot bind the other party without his consent in both offer and invitation to treat. Both offer and invitation to a treat can be revoked anytime before an acceptance is made. Both offer and acceptance may be made by a word of mouth, in writing or by conduct. Differences between an Offer and Invitation to a Treat For the case of an offer, it must be communicated for a contract to arise, therefore the two parties must be of the same mind otherwise it cannot be accepted by a person who has no knowledge that an offer has been made. In invitation to treat, it does not have to be communicated as items are displayed in a supermarket and a person enters and makes an offer when he places it on the counter and not necessary that he should have had knowledge that an offer had had been made. The following is a case studied that shows that for one to accept an offer, he must have knowledge of its existence. R v Clarke, 1927 A reward was advertised for information leading to the arrest of the murderers of two police officers, and a free pardon if the person giving the information was an accomplice. Clarke gave the information and it was held that Clarke was not entitled to a government reward since at the time the information was given by him, he had forgotten about the reward.4 For an offer it may be made to a specific individual or the whole world at large in case of an advertisement but when it comes to an invitation to treat, it cannot specify who should accept their offer in invitation to treat as anyone who enters a shop and give money to the shopkeeper make an offer and walks away with the displayed item after giving him money. The following is an example of a case studied that shows that an offer can only be accepted by a specific person. Carlill v Carbolic Smoke Ball Co, 1893 The defendants offered a reward of 100 to anyone who contracted influenza after using their smoke ball for a fortnight. The plaintiff, relying on the advertisement, bought the smoke ball and used it as prescribed, but still contracted influenza. She sued for the advertised reward. It was held that the advertisement was a true offer, and not a mere advertising puff, and the defendants were held liable to pay the reward. 5 These are the differences and similarities between an offer and an invitation to treat and we can conclude by saying that there is relationship between the two terms when it comes to the law of contract. References Emanuel, S. L, (2004), Fundamental of Business Law, 4th Edition, Educational Publishers Ltd. Sydney Emerson R. W, (2003): Business Law, Fifth Edition, Educational Publishers Ltd., Sydney Kronman, A.T (1985): Contract Law and the State of Nature, Journal of Law, Economics, & Organization, Vol. 1, No. 1 (spring, 1985), pp. 5-32 Rogerson, W. P. (1984): Efficient Reliance and Damage Measures for Breach of Contract, Rand Journal of Economics, Vol. 15, No. 1 (spring, 1984), pp. 39-53 Read More